No one could accuse the leaders of the world's leading reinsurance companies of being unrealistic or delusional - and yet day one of the Monte-Carlo Rendez-Vous de Septembre yesterday saw a unanimously optimistic picture of the market painted.
Willis Re global CEO James Kent acknowledged that a “dark picture of the industry” had been painted by some but, he said, there had still been some “robust growth” with revenues still growing in the last year. Willis Re, he said, “was much more bullish” than it had been last year and went on to say that the firm was “pretty positive” about the future.
Willis Re International chairman James Vickers pointed to the year ahead as holding “a much bigger opportunity” particularly in the three areas of privatisation of government risk, the disclosure of climate change for corporates and closing the protection gap. “The reinsurance industry is the gearbox to make this happen,” he said, and it was “on the cusp of making it happen”.
Mr Vickers also said that “the reinsurance industry is facing some of the most exciting change that it ever has” and this could only be good for business.
Partner Re CEO Emmanuel Clarke made similar points and pointed to “a bright future” for reinsurance. “We believe strongly in the future of reinsurance,” he said. “Scale matters,” he said, “and relevance matters even more in reinsurance.”
He went on to predict, “The reinsurance market will consolidate into a large handful of big firms and a number of small commoditised players.”
SCOR chairman and CEO Denis Kessler was even more enthusiastic when he said, “you will never see SCOR moan about what an awful world we live in. People are underinsured. It’s fantastic for our industry to say that we have the opportunity to satisfy that demand.”
SCOR Global P&C CEO Victor Peignet echoed this optimism when he said, “the year ahead should be much better. It is totally workable for us” both in terms of providing capital to clients as well as in offering consultancy services, he said.
Mr Peignet sounded one note of caution when he said, “We are extremely cautious about underwriting cyber. We feel that we are not mastering the topic in a way to underwrite the risk properly.”
Munich Re chairman of the reinsurance committee Dr Torsten Jeworrek pointed to the reinsurer’s forecast of “moderate reinsurance premium growth expected until 2020, with rates roughly in line with primary insurance premium growth”.
“Discipline remains important,” he said, “since the level of competition remains the same.” Cyber, he went on to say, was the unique challenge facing the industry since it remains the only “truly global risk”.
Munich Re chief underwriter Stefan Golling focused on strong growth prospects and said, “We are investing heavily in cyber insurance,” and indicated that his company would look at most risks, with the exception of “the outage of external networks,” such as utilities or internet services. These, he said, were simply “too big for insurance companies to tackle alone”.
From a ratings agency perspective, Fitch Ratings indicated that it had revised the outlook for the reinsurance sector as a whole from negative to stable, while S&P said that the sector was “robustly capitalised” and “remains on a stable outlook”.
The Rendez-Vous de Septembre continues today in Monte-Carlo.